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Euro edges higher toward 1.1420 after Eurozone sentiment beats
ZEW data showed German institutional investor sentiment rising to 26.3 in July and broader Eurozone sentiment to 23.4, though both measures stayed well below their longer-run optimism levels.
The euro gained against the US dollar on Tuesday, climbing back to just above 1.1420 after a three-day slide from last week’s peak near 1.1480. FXStreet said price support was seen around 1.1400 as positive Eurozone sentiment helped the currency regain ground while the dollar faced headwinds.
Driving the move, ZEW Institute data showed institutional investors’ sentiment about the German economy improving to 26.3 in July, up from 10.5 in June and above expectations of 18. The Eurozone sentiment index also rose to 23.4 from 9.5, beating forecasts of 11.2.
FXStreet noted that despite the improvement, confidence in the current economic situation remained weak, with the ZEW index climbing to -77.6 from -81 in June but still near historic lows. The outlet also pointed to renewed concerns over possible escalation between the US and Iran, including reports of the Strait of Hormuz and shipping disruption risks, which kept broader risk appetite muted.
In Europe, attention turns to the ECB’s monetary policy decision on Thursday, with traders expecting rates to be held but watching for signals around the possibility of another rate hike in September. FXStreet added that the US has a light event calendar, with only preliminary S&P Global manufacturing and services PMI figures due on Friday.